The ad-based gaming blitz has only just begun. Xbox is reportedly starting to test an ad-based subscription tier that could offer an hour of gameplay at a time. It may prove to be a good deal, so long as you don’t mind getting blasted with a few minutes of Mountain Dew G-Fuel advertising for the sake of cloud-based gaming. The real question is how long it will be before Xbox Game Pass gets ads as well.
Over the weekend, The Verge’s Tom Warren first spotted a teaser for a supposed ad-supported Xbox Cloud Gaming option in Xbox Game Pass. The screenshot shows the typical rocket ship you see at the launch of Xbox Cloud Gaming, though with the notice at the bottom, “1 hour of ad-supported playtime per session.” That hints users could potentially play a select few games for an hour before receiving an advertising blitz.
looks like ad-supported Xbox Cloud Gaming is coming soon 👀 pic.twitter.com/c8hAERrVB9
— Tom Warren (@tomwarren) January 17, 2026
Warren has previously claimed, based on anonymous sources, that sessions could be limited to a mere hour of game time, supported by two full minutes of pre-roll ads. Users would be limited to five hours of session time per month. You won’t need a Game Pass subscription to access a few of these select free-streaming titles, though you’ll still need a Microsoft account.
Netflix already proved people will pay for ads
These early tests of Microsoft’s first ad-based gaming venture seem more like an advertisement for Xbox Cloud Gaming and Game Pass rather than its own specialty service. Last year, Microsoft hiked the cost of its Ultimate subscription tier to $30 a month, a 50% increase. At the same time, it took Xbox Cloud Gaming out of beta and let players on cheaper Basic or Premium subscriptions access a few games on the cloud. There are a few older titles worth playing on the lower-end subscriptions, but you still want Ultimate if you want access to any day-one games or the latest releases available for download or cloud gaming.
Microsoft is now opening the first crack in its subscription model wide enough for ads to peek through. If it proves lucrative enough, Microsoft may make further adjustments to its subscription model with even more ads for lower-tier subscriptions.
Ads are the future of subscription services. The writing was on the wall close to four years ago when Netflix started cracking down on password sharing and promising to introduce ads to a platform that had long ago promised to remain ad-free. Now, Netflix’s cheapest ad-based tier is easily its most popular subscription. This month, Deadline reported Netflix’s ad-supported tier subscribers have grown by 14% year over year. Approximately 40% of Netflix accounts are on ad-based tiers as of the end of the third quarter in 2025. That number of ad-based subscribers was only 26% in the same quarter in 2024.
Microsoft is starting small by keeping a Game Pass subscription and its ad-based Xbox Cloud Gaming tests separate. Whether it will keep them exclusive is a question best left for the crystal ball.
